Duluth Mayor Emily Larson doesn’t sugarcoat the shortage of affordable housing in her city.

“We know we have an affordable housing crisis. We know that wages are not keeping up with the cost of rent. It’s a supply issue and a math issue,” she said.

At a news conference Tuesday morning, Larson praised a couple of projects now in the works that could provide at least some relief for people in search of modest-rent options, but she also acknowledged the need for more meaningful long-term solutions.

Toward that end, she announced that she is assembling a task force to address the problem by identifying sustainable financial resources that can be brought to bear for the long haul.

“The reality with affordable housing is that it costs a certain amount to build out a project or to rehab a property, and if you’re not going to get that money back in rent, something has to fill that gap,” Larson said.

Duluth can’t count on the state to come to the rescue, said Larson, noting that for two years running, the city has been unsuccessful in its bids to obtain low-income housing credits for projects that promised to add to the local supply of affordable housing.

Keith Hamre, Duluth’s director of planning and economic development, said the city has several worthy projects vying for low-income housing credits again this year, and he remains optimistic the recent funding drought will end, but would-be developers won’t know for certain until November.

Meanwhile, Larson hailed a couple of projects that are moving forward:

  • An 84-unit affordable housing development proposed for the Board of Trade Building

  • Bluffs of Duluth, a proposed 35-unit senior housing development in the Coffee Creek area, where 20 percent of the apartments would be dedicated for residents holding an elderly waiver voucher

Together, the two projects could bring $27.5 million in new investment to Duluth. To edge those projects forward, the city is considering assistance in the form of a $1.8 million tax-increment financing package for the Board of Trade Building and $125,000 in abated city property taxes for Bluffs of Duluth.

These subsidies are some of the tools now available to the city, but Larson said: “We envision affordable housing also utilizing private resources, working with private employers, working with our medical district and medical community and others.”

Hamre also laid out plans for a pilot project city administration hopes to launch. Larson aims to ask the Duluth City Council to allocate $250,000 from the city’s Community Investment Trust that could be paired with $500,000 from the Community Development Revolving Loan Fund to support a new pilot program designed to help rehabilitate 15 to 23 units of deteriorated affordable housing in the Lincoln Park and Hillside neighborhoods.

When Larson first took office more than three years ago, the city already was facing about a 4,000-unit overall housing shortage, according to a Maxfield Research report. She said the city has been able to add about 1,000 units of housing during her tenure.

While Larson said that’s great, she contends Duluth has much more to do, especially when it comes to increasing the supply of affordable housing.

Hamre agreed that the city has made modest progress at best in addressing the shortfall of 1,100 units of needed affordable housing identified in the Maxfield study. He said most of the recent housing gains instead have addressed the demand for higher-end market-rate rental units.

Hamre said he hopes some of the new projects and initiatives will begin “to make a dent” in a local affordable housing market as well, where people currently often wait 18 to 24 months to successfully obtain and make use of Section 8 housing assistance vouchers.

“You’ve got to provide some kind of assistance or there’s got to be some resources to bring that rent cost into the affordable range,” he said.

Larson said there are no easy answers to the need for affordable housing, but the city must find a way to address the shortage or else risk harm to public health and the local economy.

“It has been one of the hardest and most frustrating issues to address, because housing is expensive, projects take time, and we require a lot of partnership ... to achieve success,” she said.